Editorial: Pay the bully no mind

14-Feb-2014

By Kate Kachor

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It comes as little surprise that segments outside the financial advice industry would cry foul over the federal government’s draft changes to Labor’s advice reforms.

Since the start of the new year, Industry Superannuation Australia (ISA) has dragged its negative message about the supposed terrors that lie behind the planned changes to the Future of Financial Advice (FOFA) reforms from media outlet to media outlet.

ISA has raised concerns and claimed the government’s reforms may lead to a return to the bad old days, with changes to conflicted remuneration on general advice having the potential to pave the way for a return to commissions.

Like good leaders wanting to calm the troops, advice chiefs from the FPA and Association of Financial Advisers (AFA) have said enough is enough and have taken a stand, fighting back against the public attacks.

While ISA may raise a valid point about a lack of clarity regarding the payment treatment of general advice, there are ways to go about addressing concerns.

Bashing out press releases is not the way, in my view, of handling this situation, particularly when consumers are involved.

If ISA plans to continue to brandish its one-sided message, then it is at risk of being the true danger to consumers.

For the majority of consumers, the notion of FOFA is lost on them. The savvy investors will no doubt be aware of the looming changes through their advisers, and those who are not are potentially the exact individuals this country’s professional advice industry is trying to engage.

Wild claims about changes to reforms, which have not been passed or even been properly debated in parliament, are maddening.

A number of advisers have shared their frustration with me, in recent days, over the path ISA has taken.

For these advisers, the comments are just unnecessary noise that could do more harm than good.

Their comments were obviously the polite version. I’d take a punt that what most advisers think about ISA would involve fewer words.

Groups like ISA, and its former incarnation the Industry Superannuation Network, have played the disruptor, the agitator and the would-be nemesis of Australia’s financial planning industry for years.

This has been a curse, but it could also be a blessing.

Yes, there is a danger Australians will fall victim to ISA’s rants. Yes, the comments are unhelpful and add an additional layer of work for advisers.

However, the positive in all this is that, rightly or wrongly, more Australians are hearing about financial advice. Bear with me.

If the FPA and AFA’s primary goal is to increase the number of Australians having access to financial advice, then perhaps this is another avenue.

Perhaps instead of concerning yourself with the noise, time should be spent reinforcing your services and skills with staff and clients.

For the naysayers who might try to cut you down, focus on your strengths. In short, pay the bully no mind.

As a side note, today marks financialobserver’s first anniversary.

I would like to thank the FO team for their great work. Rock on.

I would also like to thank our readers. Without your support and feedback we wouldn’t be here.

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